The independent contractor industry is growing and for good reason. For one, it gives you freedom. Still, many people may not know much about this world like how to protect yourself. There is no large corporation protecting you, so you have to consider a few things like the following.
Think About Taxes
For the most part, reporting your taxes is not a big deal as a wage earner but this changes for independent contractors. Reporting your taxes is going to be a little more complex, which means that the likelihood of mistakes is higher. You do not want to put yourself in this position, especially if you do not have to. Hire a professional tax preparer to help you do your return right.
Consider Insurance Options
The next thing you have to think about is insurance. You are an independent contractor, meaning you are liable for anything that might go wrong. A pharmacist who mixes the medication incorrectly would be liable for damages should he or she be an independent contractor. In other words, you are on your own, and you need to take steps to protect yourself using insurance.
One type of insurance that you should get is independent contractor liability insurance. Do a little comparison before choosing one, but make sure you have this before you start your next job. It is a way to protect yourself should anything go wrong on your end.
You may also want to consider getting worker’s compensation insurance to make sure you are covered should you be in an accident or get injured. Medical expenses can go up pretty quickly, but this insurance is there to give you peace of mind. Keep in mind that you work on your own so it is in your best interest to get back to work after an injury as soon as possible and prompt medical attention can help you do just that.
Legal Experts on Your Side
You will need to seek out the manufacturer of the tool, and a good lawyer who specializes in these types of cases should help you fight back.
Make sure that the representative you find is experienced and knows what someone in your position might need. For example, Cogan & Power, P.C. points out that a good legal team will “understand that it is often difficult for injured clients to travel,” meaning that they should “frequently meet with clients in their homes” to prepare for the upcoming legal battle.
A good lawyer can also help you draft a good contract to ensure that everything between parties is legally binding. This protects you, those who hired you, and it also helps you trust each other. The chance of getting stiffed is higher when you are an independent contractor, so do not take that chance. Draft a legally sound contract with each company or individual you do business with.
Think About the Future
A regular employee has the opportunity to start a regular retirement plan. This plan is offered by corporations to employees, but you do not have that provided to you. Your retirement fund is your responsibility, so you need to make sure you start one as early as possible.
There are a number of options for you as an independent contractor like a personal pension plan or an IRA though these are just some of the many options. It may be a good idea to talk to a banker, financial planner, or an accountant to see what kind of steps you can take to plan for your future. No matter how healthy you feel at the moment, you are going to age and will want to retire some day. You’ll need the financial support at some point.
Hopefully, some of these suggestions make it easier for you to protect yourself out there. Talk to fellow independent contractors to see if they have additional pointers for you.
Ryan Yarbrough is a small business consultant, speaker, and the manager at Davis Financial Services, a small business consulting firm.